The multiplier effect of infrastructure - Marcio Senne de Moraes, Vale

The multiplier effect of infrastructure

June 2014

Mining on Top – 24th of June 2014

• A global mining company headquartered in Brazil

• The global leader in iron ore and pellet production and the second largest nickel producer

• We also produce copper, coal, fertilizers, manganese, ferroalloys, cobalt and platinum group metals

• We invest in logistics and energy

We are Vale

MissionTo transform natural resources into prosperity and sustainable development

VisionTo be the number one global natural resources company in creating long term value, through excellence and passion for people and the planet

ValuesLife matters mostValue our peoplePrize our planetDo what is rightImprove togetherMake it happen

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Created by an executive order on June 1, 1942, the company’s operations were initially concentrated in Minas Gerais.

In its first year, it produced 40,000 metric tons of iron ore, the same amount it now ships out every hour.

1942

40,000 tons

Privatized on:

1997May 6Market value:

Net earnings:

Workers:

US$10.5 billion

US$350 million

11,000 (direct employees)

2013Market value: Net earnings:

Workers:

US$584 million

Over 130,000 (employees and

service providers)

US$79.206 billion

Vale around the world

Vale is headquartered in Brazil, with activities on 5 continents, employing over

130,000 people including indirect employees and contractors.

Our business

Logistics – our logistics infrastructure integrates mines, railroads and ports. This is important as it enables us to ensure rapid, low-cost and sustainable transportation of our products.

Steelmaking – Promoting the development of steelmaking in Brazil – the country that is home to our biggest operations – is part of our strategy.

Mining – we seek continuous improvement and overcoming standards of excellence and research in the extraction and mineral production

Energy - Find out how we are investing in initiatives to reduce energy consumption and developing renewable sources, such as biodiesel.

Key logistics projects around the world

Carajás – CLNS11D: The largest integrated logistics investment ever undertaken for iron ore in Brazil.

Nacala Corridor: coal, general cargo, passengers - one of the largest logistics investment ever undertaken in Southern Africa.

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Vale in Africa

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Vale in Africa

Implementation of Zogota mine in Simandou South

Guinea

ZambiaLubambe Mine (Vale-ARM-ZCCM JV) in production since 2012. Lusaka office is the base for the exploration team and project generation

MalawiDevelopment of the Nacala logistics corridor

Moatize coal mine and its expansion project, logistics operation and mineral exploration

Mozambique

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Overview

A major investor in the continent:

More than US$ 6 billion of investments planned for the continent in the upcoming years, fostering development and economic diversification.

• Expansion of the Moatize coal mine – US$ 2 billion.• Nacala Railway corridor – US$ 3.4 billion.• Nacala Port – US$ 1 billion.

Total: US$ 6.4 Billion

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2004: Vale won the international bidding to develop the studies in the Moatize coalfield

2007: Signature of the mining concession contract

2008: Start of constructions in the Moatize industrial complex

2011: Start of operations, transportation and shipment of coal

Investments in Mozambique

Long term investments (around 40 years)

Mineral exploration and feasibility studies

3 year projects implementation

35 years of operations

Moatize IRehabilitation of Sena-Beira LineCais 8 Coal Terminal

Operation Moatize IOperation Sena-BeiraTCC 8

Moatize IINacala Corridor Project

Operation Moatize I &IIPort and Rail Operations (shareholder)

20132004 2007 2008 2011 2014 20462013

• Moatize I - in operation since 2011

• Mine’s expansion (Moatize II) is projected to commence in 2014

• Total Capex: US$ 2.068 billion

• Long-term projected capacity of 22 million tonnes per year

• Supported by the Beira and Nacala rail/port transport Corridors, over 600km and 900km in length, respectively

Moatize Coal Mine and integrated infrastructure

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2004: Vale won the international bidding to develop the studies in the Moatize coalfield

2007: Signature of the mining concession contract

2008: Start of constructions in the Moatize industrial complex

2011: Start of operations, transportation and shipment of coal

Strategic transport corridors foreseen for eventual development / realization

Source: PIDA (Programme for Infrastructure Development in Africa)

Transport corridors – benefits beyond mining

Beira and Nacala corridors

1515

2004: Vale won the international bidding to develop the studies in the Moatize coalfield

2007: Signature of the mining concession contract

2008: Start of constructions in the Moatize industrial complex

2011: Start of operations, transportation and shipment of coal

Nacala Corridor Projecta pioneer investment and catalyst for regional economic growth

1616

2004: Vale won the international bidding to develop the studies in the Moatize coalfield

2007: Signature of the mining concession contract

2008: Start of constructions in the Moatize industrial complex

2011: Start of operations, transportation and shipment of coal

Vale in Malawi

A new railway stretch of 137 km, between Chikwawa and Nkaya Junction, in the southeastern province of the country, which will be built by Vale Logistics Limited

The recovery of 99 km, between Nkaya Junction and Nayuchi, by CEAR.

Timeline2005 – Feasibility Studies2011 – Concession agreement with the Malawi Governement2012 – Commencement of the fieldworks - Malawi2014 – Start up of the Nacala Railway Corridor - Malawi

View of the construction of one of the bridges

View of works on the railway

Social development

1818

2004: Vale won the international bidding to develop the studies in the Moatize coalfield

2007: Signature of the mining concession contract

2008: Start of constructions in the Moatize industrial complex

2011: Start of operations, transportation and shipment of coal

Social InvestmentsDirect contribution in Mozambique

• Local suppliers: About 1.100 companies in Mozambique, US$ 2.5 billion in local procurement.

• Jobs: 13,826 jobs created, 2,155 direct and 11,671 indirect jobs. 85% of the local workforce.

• Training: over 800 Mozambicans trained since 2008; 186 were trained in Brazil in exchange programs

• Social investments: over $ 38 million invested since 2010. In Tete, social investments are expected to exceed $ 30 million in the coming years.

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Social DevelopmentOur social programs are conducted from two perspectives

Voluntary actions, conducted by Vale Foundation, in the areas of:

Education, health, infrastructure, agriculture, sports, culture and heritage. Shares in cooperation with public, private and community organizations, with the mission to promote the well-being and socio-economic development.

Measures to eliminate or mitigate the impacts of our activities:

Vale seeks to be a reference in social action to make a positive contribution to the communities, of which it is part, respecting their cultural diversity and community legacy.

2020

Employment Generation

More than 13.000 employs generated (direct and contractors).

89%

11% Of the employees are

from Mozambique

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Employment generation by region

Strengthening local enterprises - The Linkages

Program in Mozambique and Malawi

Strengthening the local supply chain

Suppliers

In 2013 we spent US$ 1.4 billion in Mozambique, 75% of which with local businesses.

Vale priorizes local providers in order to stimulate the dinamization of the regions where it operates.

Main characteristics to become a provider

•Quality•Entrepreneurship (remote regions)•Health & safety•Ethical conduct

Acting in the Value Chain

Many Mozambican companies has expanding its activities to the provinces where Vale operates.

Recruiting and out search services

Recruiting and out search services

Cleaning servicesCleaning services

Gardening servicesGardening services

Sealing servicesSealing services

Air conditioning maintenance

Air conditioning maintenance

Tete

Nampula

Sofala

Maputo

Expansion of local suppliers

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Vale in Mozambique – strengthening local enterprises

Over US$1.6 billion spent by Vale in contracts with over 800 Mozambican companies.

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Vale in Malawi – strengthening local enterprises

Over US$3.5 million spent by Vale in contracts with over 70 Malawian companies, in 2012 alone.

A wide array of local enterprises benefited

Thank you!

Marcio Senne de MoraesExternal Affairs Global Director